Who Owns Corporate Culture — Leaders or Employees?

Who Owns Corporate Culture?

Our organizational alignment research found that corporate culture accounts for 40% of the difference between high and low performing companies in terms of revenue growth, profitability, customer loyalty, and employee engagement.  If you are unhappy with the culture at your organization, what can you do to influence it?   Who owns corporate culture at your company and will have the greatest impact on creating higher levels of performance?

Do leaders own corporate culture or does the workforce?

The Definition of Corporate Culture
We define corporate culture as the way work truly gets done on a day-to-day basis.  Smart leaders know that your culture exists by either design or default. In other words, in every organization there is a combination of assumptions and behaviors that define the collective attitude of a company’s workforce.

In some organizations this combination has been carefully crafted over time to best execute a coherent strategy; in others it has reactively evolved without purposeful strategy and culture alignment.

Everyone Owns Corporate Culture
We believe that both leaders and employees should own the culture of their organization.  They just have different roles and responsibilities.

Leaders and Corporate Culture
Perhaps leaders have the most power to design, shape and align a corporate culture that matters. Since leaders are responsible for setting the strategic direction, they are also responsible for ensuring that the way the strategic direction gets carried out on a day-to-day basis – your culture — is fully aligned.  Because strategy must go through culture to get fully implemented, leaders must assess and create cultural alignment.

Otherwise, the corporate strategy is just wishful thinking.

Beyond setting up the cultural “way” to support and accelerate a particular business strategy, leaders need to understand their critical role as models of the desired behaviors. The way leaders act each and every day has a greater influence on their employees than they may realize. Whether they know it or not, leaders are in a fishbowl.

The workforce is always watching. If a leader’s behavior is out of line with the culture they espouse, you can be sure the leader’s behavior, rather than the desired workplace culture, is the one that will win out. Leaders need to understand that the amount of energy they focus on culture will determine how important it appears to employees.

Modifying and aligning culture is difficult. It takes a sustained and consistent effort over time.

Employees and Corporate Culture
So where do employees fit into organizational culture? They need to take culture one step beyond the example and commitment of leaders.  Employees need to monitor and own their culture – often by helping to create corporate values.  They need to live and breathe it in every choice they make.

If, for instance, leadership has determined that the company culture needs to support more decentralized decision making to best execute their strategy, employees (and their bosses) need to make sure they have the knowledge, skills, and beliefs to make effective decisions when it matters most.

The Bottom Line
Organizational culture matters.  It is the glue between your strategy and your people.  Sustainable and high performing cultures are the responsibility of both leaders and employees.  Culture should be shaped by leaders and employees in concert in a way that is aligned with your corporate strategy.

To learn more about creating a high performance and purposeful culture, download The 3 “C’s” that Create High Performance Cultures